Labour MEPs voted today for the EU to do more to help developing countries clamp down on tax dodging, measures which will give governments resources to improve healthcare, sanitation and education.

The report calls for the European Commission to put forward an action plan on supporting developing countries in fighting tax avoidance and evasion and setting up fairer tax systems; financial and technical assistance to developing countries; enforce country-by-country reporting for multinationals; and ensure the UN taxation committee has teeth.

Action on tax dodging will help developing countries work to towards the UN Sustainable Development Goals, which aim to complete the task of the Millennium Development Goals and provide healthcare and education to all children.

Linda McAvan MEP, chair of the European Parliament development committee, told MEPs:

“A recent report from Save the Children estimates the tax lost by misinvoicing in sub Saharan Africa, in countries with the worst maternal and child mortality rates, is around $15 billion per year.

“This is enough money to plug the gap in their health budget, and to deal with childhood malnutrition. Those who dodge their tax in this way are literally robbing food out of the mouths of babes.

“To tackle this and other illicit financial flows, we need more transparency about taxes paid by multinationals.

“We need tough new accountancy rules such as country-by-country reporting, which is one clear way to ensure companies pay their fair share of tax wherever they operate, and developing countries collect this tax to use for vital public services.

“It is already used in the European banking sector and in extractive industries, so the model is there and we know need the political will to extend it further.”

“Tax dodging doesn’t just affect businesses and citizens in Europe; it can also be devastating for countries in the developing world. The amount of unpaid tax owed to developing countries is an unbelievable $104 billion every year.

“Just imagine what that money could pay for, and the difference it could make to the lives of the poorest people in the world. That’s why it is essential we take action at European level to clamp down on multinational companies not paying their fair share of tax.

“A crucial first step towards achieving that is requiring all major multinational companies to report publicly exactly where they make their profits, and where they pay their taxes.”